Term Life Insurance Articles
Terms To Know When Reading Universal Life Insurance Quotes
2012-01-17
When reading through universal life insurance quotes, it is important for a person to know the terminology associated with the life insurance industry. Otherwise, a person probably would not be able to understand the content within the quote. First of all, a person must understand what universal life insurance is. It is a type of life insurance that is permanent, and the premium is determined by a projected interest rate and cost of insurance. Typically, universal life insurance policies will offer you more flexibility and cost less. This definition is full of terms that are important to universal life insurance coverage.
A premium is the payment that keeps a life insurance quote in place; usually, a person pays it per month. Many universal life insurance quotes come with a no-lapse guarantee rider. This means that the policy won't lapse, and is also known as lapse protection. No matter what happens, even if the premium falls to nothing, the premium will never rise. The death benefit will also remain unaffected. This is the amount that, once proof of death is produced, the insurance company pays the policyholder. Cash value is also an important term to understand. It is what the policyholder will get when he or she gives up the life insurance coverage he or she has bought. After many years of holding a policy, a holder's cash value will be the same as the reserve value.
Face amount has a similar meaning to death benefit. It is the amount the policyholder and insurance company agreed upon on the front page of the policy to pay at the policyholder's time of death. People should also be familiar with other types of life insurance coverage in order to compare rates and benefits with universal life insurance policies. Whole life insurance is just what it sounds like: coverage for a person's whole life. It does not necessarily get paid at the time of the policyholder's death, but rather at different times during the policyholder's life. A type of universal life insurance, variable insurance means that a policyholder can create sub accounts for different investments. Variable life insurance can be thought of in terms of mutual funds because they work basically the same way. The person can invest his or her policy in whichever sub account he or she chooses.
If a person chooses to have a death benefit, he or she will have a beneficiary. This is the person whom the policy is paid to upon the policyholder's death. It is important to understand universal life insurance terms so a person finds the policy that meets his or her needs the best.
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When reading through universal life insurance quotes, it is important for a person to know the terminology associated with the life insurance industry. Otherwise, a person probably would not be able to understand the content within the quote. First of all, a person must understand what universal life insurance is. It is a type of life insurance that is permanent, and the premium is determined by a projected interest rate and cost of insurance. Typically, universal life insurance policies will offer you more flexibility and cost less. This definition is full of terms that are important to universal life insurance coverage.
A premium is the payment that keeps a life insurance quote in place; usually, a person pays it per month. Many universal life insurance quotes come with a no-lapse guarantee rider. This means that the policy won't lapse, and is also known as lapse protection. No matter what happens, even if the premium falls to nothing, the premium will never rise. The death benefit will also remain unaffected. This is the amount that, once proof of death is produced, the insurance company pays the policyholder. Cash value is also an important term to understand. It is what the policyholder will get when he or she gives up the life insurance coverage he or she has bought. After many years of holding a policy, a holder's cash value will be the same as the reserve value.
Face amount has a similar meaning to death benefit. It is the amount the policyholder and insurance company agreed upon on the front page of the policy to pay at the policyholder's time of death. People should also be familiar with other types of life insurance coverage in order to compare rates and benefits with universal life insurance policies. Whole life insurance is just what it sounds like: coverage for a person's whole life. It does not necessarily get paid at the time of the policyholder's death, but rather at different times during the policyholder's life. A type of universal life insurance, variable insurance means that a policyholder can create sub accounts for different investments. Variable life insurance can be thought of in terms of mutual funds because they work basically the same way. The person can invest his or her policy in whichever sub account he or she chooses.
If a person chooses to have a death benefit, he or she will have a beneficiary. This is the person whom the policy is paid to upon the policyholder's death. It is important to understand universal life insurance terms so a person finds the policy that meets his or her needs the best.
